The Indian travel trade is trying hard to salvage the summer season as high airfares and rocketing hotel rates tighten margins. TravTalk asks key travel agents and DMCs if the market is making any profit.
TT Bureau
Summer 2026 was supposed to be the travel industry’s great comeback story. Instead, travel agents and DMCs across India find themselves trapped in a squeeze. Sky-high airfares, rocketing hotel rates, and wafer-thin commissions are turning what should be a golden season into a fight for survival. While the outbound travel demand has surged, profitability has not kept pace. From luxury cruises to corporate travel, margins are shrinking, costs are climbing, and even the busiest players admit they are merely sustaining operations, not breaking even. Rahim Aslam, Founder, One Above Global (OA Globe DMC) says volumes may recover quickly but margins take much longer to heal. “The demand has come back strongly, but profitability has not followed at the same pace for us. There is a constant push from the market for competitive pricing, while on the ground, costs have increased — whether it’s hotels, logistics, or overall operational expenses. So, somewhere, the trade is working harder for thinner margins. It’s become more about volume, efficiency, and smart contracting rather than high markups. The focus has shifted from ‘how much you earn per booking’ to ‘how sustainably you can scale your business’.”
However, margins of Travstarz Global Group — which has a strong presence in the Asia region — have not been affected much due to their strength and volumes to these destinations. “We continue to maintain the same. Japan and Vietnam have become the recent favourites,” says Pankaj Nagpal, Managing Director, Travstarz Global Group.
The cruise segment
Nishith Saxena, Founder & Director, Cruise Professionals, says the crude oil prices are currently around US$ 100 per barrel, but only two cruise lines have resorted to implementing fuel surcharges so far. “The last time cruise passengers actually paid fuel surcharges on a widespread basis was nearly 18 years ago, during the 2007–2008 oil price spike. So, the margins for us have not been impacted as the retainer levels remain the same, but the passenger sales are somewhat impacted,” he says.
Xavier Peres, Director, Speedbirdtravels.com, says, “The busiest summer in years is delivering surprisingly thin rewards. Outbound is surging, but margins simply are not keeping pace. Airfares remain elevated while commissions stay stubbornly flat, and OTAs now dominate the traveller’s discovery path, pushing agents into a hyper transparent marketplace where markups vanish the moment a client opens an app. At the same time, airlines, hotel chains, and even small suppliers are investing aggressively in direct digital channels, steadily shrinking the intermediary’s share. So even as topline revenues rise, operating margins continue to hover around 6.5–7 per cent,” he says.
Meanwhile, Dheeraj Ranjan Kumarr, Founder, Balitrip Wisata (Bali) and Group Principal, DMC Hub, is witnessing a margin contraction of around 3–5 per cent on average, primarily driven by elevated airfares and aggressive pricing by OTAs. “However, this shift is also pushing serious players to move towards value-based selling rather than price-led competition. We are focusing on curated experiences, controlled inventory, and direct contracting to protect margins while maintaining service quality,” Kumarr shares.
High airfares are also eroding service fee, as is the case with Sameer Karnani, Managing Director, Arunodaya Travels. “With reduced business and fixed expenses, profit margins are being squeezed. We see a 10-15 per cent drop in profit margins,” he says.
Many agencies are facing this ‘scissors effect’ where costs are rising faster than revenue. Sunita Amarnani, Executive Vice President, Vexplore, says that for TMCs, the cost of ‘duty of care’ has spiked. “Managing VVIPs or large student groups now requires more intensive risk assessment and 24×7 contingency planning, which eats into fixed service fees. The era of ‘easy’ margins is gone,” she says.
Merely sustaining, not breaking even
With the outbound demand plummeting, revenue has been hit. Today, it’s about survival with a strategy, Aslam says. “Earlier, the market was more stable. You could plan long-term, negotiate better, and operate with more confidence. Today, pricing fluctuates, availability is tighter, and decisions have to be much quicker. It has forced everyone in the industry to become more agile.”
Is all-inclusive performing better?
Well, yes and no. Bruno Courbet, Director Thailand, Indonesia, India & New Markets, Club Med, says, “While the current landscape presents its challenges, the all-inclusive model remains a stable and attractive option. We see a lot of success among partners who focus on this value proposition.” Despite this, Amit Thadani, Director, Nik n Ami, says the industry continues to perform well overall. “One positive trend we are witnessing is the sharp rise in demand for destinations such as Antarctica, Finland, Reunion, Disney Cruise, Bintan Resorts, Vietnam, Bali, and Thailand. Travellers and are willing to pay a premium for exclusive, less crowded, and experience-driven itineraries,” he says.
A different summer
However, Swaytank Maheshwari, Founder, Rainbow Vacations, says his company’s positioning in the market allows them to work on required margins. “We have been working with our clients and database to retain that market positioning. The issue is that Europe files have reduced, and big files that normally summer brings are under pressure. So, even minimum profitability has become a challenge for us. This time it’s a different summer,” he adds.
A different summer indeed. Jay Bhatia, Director, Tulsidas Khimji Holidays, calls for greater discipline and strategic focus. “Our knowledge, experience, and accountability are rightfully being monetised, as travellers increasingly seek informed guidance rather than mere options. Today, business requires sharper expertise and agility. The role of a travel professional has become more critical than ever,” he says.
In short, the tale is one of despair, but also of resilience under duress. Margins have evaporated, costs have climbed, and the days of easy profitability are long gone. Yet, across the board, agents and DMCs are adapting — sharpening their expertise, pivoting to curated experiences, and monetising their knowledge rather than just inventory.
The industry is no longer competing on price alone; it is competing on trust, insight, and agility. While the summer may not deliver the windfall of yesteryears, those who survive this squeeze will emerge leaner, smarter, and better equipped for a future where volume means little and value means everything.
